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Collateral Damage: The Impact on Pakistan From U.S. Sanctions Against Iran

Senior Scholar Richard Nephew assesses the unintended consequences of sanctions and explores to what degree such consequences should be considered when formulating statecraft. Using the case of U.S. sanctions against Iran--which were first imposed in 1996 in the Iran-Libya Sanctions Act (ILSA) and followed up by the comprehensive embargo against Iran erected by President Clinton--Nephew examines whether these sanctions had a discernible, deleterious impact on Pakistan and its energy firms, as a result of a diminished Iranian natural gas sector.

Nephew concludes that Pakistan was harmed by the imposition of sanctions against Iran, but that it is impossible to ascertain how much the effectiveness of the sanctions regime would have been impaired in their absence. Based on his analysis, he offers three over-arching recommendations for policymakers considering the use of sanctions:

When imposing sanctions, ensure preparations for action include an extensive exploration of the range of consequences that may result from those sanctions. Consider long-term economic damage, especially with respect to the interests of those beyond the sanctioned and the sanctioner.

Do more to help address the inevitable, if unintended, consequences from sanctions. This is not only fair and decent, but taking such an approach can also strengthen sanctions enforcement on the part of others.

Conduct more detailed analysis on the potential consequences of sanctions imposition, including through use of public information and comment periods.

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